Pat Deering (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I must declare a conflict of interest in that I am one of the 1,769 year-round milk producers. The Department of Agriculture, Food and the Marine and Teagasc organised a very interesting conference entitled "Managing price volatility and expansion in a post-quota era" last Wednesday in the Red Cow. The buzzword for me was "volatility", because that is the way it will be in the future.

What I thought was the most interesting part of today's presentation was the slide that showed the price of liquid milk in 1995, which was 29 cent per litre, and the fact that we are back to a similar price nearly 20 years later. In 1995 the cost base was totally different from today's cost base. In my opinion, it will not be viable to produce liquid milk in the future.

Dr. Ó Céidigh spoke about UHT milk in Spain and other European countries. We have had the advantage of producing fresh milk.

We are going down the same road very fast. It will not be possible after the quota ends, when numbers will increase and the cost of producing milk during winter will be far too high, to keep the industry sustainable. I know many farmers in my area who are doing the same work as I have done and they will increase milk production off grass. They will not produce milk from November to February at a very high cost, and that is where we will have a big problem going forward. That is where there will be a big problem and it must be addressed. It would be a sad day if we had to put UHT milk on our corn flakes in the morning, so it will be a big challenge after the ending of the quota. There is a willingness to increase milk production but not at any cost. When we increase milk production, it will be to scale; there will be more milk, the price will be more volatile and farmers will have to be more efficient. The most efficient way of producing milk will be off grass and not during the winter. That is the challenge for the National Milk Agency and the primary producers.

Another interesting statistic is that 25% of milk used is produced outside the State. Are we importing 25% of what we use? If so, it is a fairly startling statistic, as we are oversupplying milk. Is it possible to address the issue or reduce the figure? Has the figure been growing steadily over the past number of years? The matter needs to be addressed, although it is not that I am against imports. We are producing milk at a serious cost and the committee produced a report not long ago which demonstrated that many supermarket multiples use milk as a loss leader at the expense of the primary producer. That issue must also be addressed.